Federal Circuit: Breach of open source license conditions can lead to copyright infringementAugust 16, 2008

In a recent decision, the Federal Circuit addressed some of the copyright issues involved with the open source movement. Often open source software is distributed under a so-called copyleft license, which permits others to use the work, subject to certain restrictions. The GNU general public license is the most well-known of these licenses. The license at issue in this case was the Artistic License. The district court held that because the copyright holder elected to give the work away under this license, any remedy for a violation of the license terms was effectively a breach of contract claim, not a copyright infringement claim. The Federal Circuit vacated the district court's decision based on the finding that there was sufficient consideration to form a contract under the Artistic License and that the grant of rights under the license was contingent on compliance with the various restrictions in the agreement. Essentially, the potential viability of the plaintiff's copyright infringement cause of action hinged on whether the restrictions in the Artistic License were considered conditions of the license or covenants. The court held they were conditions, and as a result, violation of the conditions took the defendant's use of the work outside the scope of the license, rendering it an infringing work.While this is a copyright case, it also provides insight as to how the Federal Circuit may treat patent exhaustion arguments post-Quanta, as the sales in Quanta that resulted in patent exhaustion were conceded to be within the scope of the license.More on Jacobsen v. Katzer after the jump.The case revolved around software and associated files for programming decoder chips used for controlling model trains. The plaintiff, Jacobsen, managed the Java Model Railroad Interface (JMRI) open source group. JMRI makes their software and associated configuration files available on the web under the Artistic License. This license places several requirements on licensees, including a requirement that the copyright notice and attribution information be maintained on all downloaded files, and that any changes from the originally-provided code be noted for future users.The defendants produce a competing program sold commercially. During development of their software, the defendants downloaded files from JMRI's site and incorporated them into their software. In doing so, the defendants removed the copyright notice and attribution information in the files. Jacobsen (on behalf of JMRI) filed suit for copyright infringement and asked for a preliminary injunction.At the hearing on the motion for preliminary injunction, the defendant argued there was not sufficient consideration for the contract and any noncompliance with the contract provisions was a breach, not copyright infringement. The district court held the Artistic License was essentially an unlimited license to use the files which made any restrictions in the license merely contractual covenants. As a result, the district court found this to be a contractual matter, meaning that there was no presumption of irreparable harm (as there is in the Ninth Circuit in copyright infringement cases) and the injunction was denied.The Federal Circuit vacated, and made two key findings in this case. The first was that despite a lack of money changing hands, there was sufficient consideration for the formation of a contract. The court noted that open source projects obtain other economic benefits from the distribution of software including increase of market share, increases in international reputation, and improvement to the software from contributors. As a result, the Federal Circuit found sufficient consideration for the formation of a contract under the Artistic License.The second key finding was that the restrictions in the Artistic License, under California law, constitute conditions, not just convenants. As a result, licensees who act outside of the scope of the license are therefore potentially liable for copyright infringement. This determination depended on Ninth Circuit case law (as it was not particular to patent law) and the actual wording of the Artistic License. Specifically, the Artistic License indicates that "[t]he intent of this document is to state the conditions under which a Package may be copied." Additionally, the court noted that the rights to copy modify and distribute were granted "provided that" the conditions of the license are met. Under California contract law, the term "provided that" is considered conditional language. As a result, the court found that the rights granted by the Artistic License were conditioned upon the terms of the license.To read the full opinion in Jacobsen v. Katzer, click here. Interestingly, this is the second copyright case to come to the Federal Circuit in the past few weeks.

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